Frequently Asked Questions
- When is a good time to buy?
- Shouldn't I sell in the spring?
- Is there a tax payable when buying?
- I own a home and want to move. Should I sell first or buy first?
- Aren't the assessed values usually about 5% - 10% below actual value?
- What's the difference between "deposit" and "down payment"?
- How much deposit do I need in order to buy?
- How much down payment do I need in order to buy?
- Should I get an inspection?
- I made a full-price unconditional offer and the sellers didn't take it. Can they do that?
- How long do you usually have from the contract date (the date the offer is accepted) until move-in date?
- Can I have the house on the same day I pay for it?
- The sellers want me to pay for the house but not move in for a week. Can they do that?
- My agent says there are 6 offers on the house I want. Should I still make an offer?
- What is the difference between strata and condominium?
- Does the seller have to respond to my offer right away?
- Can I take the fridge with me when I sell my house?
- What things are usually included in the sale?
- How long are houses taking to sell today?
- As a rule, how much below the asking price are houses selling?
- An agent advertises that he sold a house for 98.6% of the asking price. Is that good?
When is a good time to sell?
There is no particular time of year when prices are consistently highest, year after year. Sale prices fluctuate throughout the year and high points vary from year to year. Trying to time the high points in the real estate market is as futile as market timing in the stock market. My advice is to consider your personal circumstances and time your move to suit your requirements. If you already own a home and want to move to another home, market fluctuations are less important than for first-time buyers. If the market goes up, you get more for your home but pay more for your next home. If it goes down, you get less but you pay less.
You may find there is less competition (fewer buyers) during the slower periods (summer and Christmas/New Year).
Many people decide to sell in the spring because the flowers are out and everything looks great. If you go on the market then, you may have more competition.
Is there a tax payable when buying?
Yes. The B.C. PTT (Property Transfer Tax) is 1% of the first $200,000.00, 2% from $200,000.00 to $2,000,000.00, 3% to $3,000,000 and 5% above that. First time home buyers may be exempt, provided they meet numerous criteria. There is an additional Foreign National tax of 20% of the proportionate share of the purchase. For more information, click here.
The GST (Goods and Services Tax) is charged ONLY IF YOU BUY A NEW HOME. This is 5% of the purchase price. You may qualify for a rebate of part of the GST if you meet numerous criteria. For more information, click here.
Please note that this information is current as of 2018 but is subject to change. Taxes are complex and you should review any tax questions with your lawyer or notary.
If you sell first, you may not find a home you want to buy, and have to rent for some time. If you buy first, you may not sell your house and therefore not have the money to buy your new house. In the current market, with low supply, people sometimes will buy first and try to negotiate a long completion date, with a back-up plan to have bridge financing ready if required. This is a complex matter and you need to be fully informed before proceeding.
Aren't the assessed values usually about 5% - 10% below actual value?
BC Assessment Authority assessed values are an approximation of property value for taxation purposes. BCAA tries to be as accurate as possible, but doesn't have the resources to go into every house in the province. In a volatile market, assessed values can be higher or lower than actual values. In a steadily rising market, they may be low. The best way to determine value is to compare to similar properties that have sold recently in the area.
Deposit is the cash you have to provide when you make your offer. Down payment or equity is the amount of cash you have available which, when added to your mortgage, equals the purchase price. Your deposit forms a part of your down payment.
Usually about 5% of purchase price, often provided as an initial amount upon offer acceptance (say $1,000) and the balance upon subject removal or within a certain (short) period of time if you need time to move funds into your bank account.
An inspection is totally at your option when buying. First-time buyers may be unfamiliar with construction and want to have an inspection. In a brisk market, many sales are unconditional. A seller choosing between an unconditional offer and an offer with an inspection condition will probably take the unconditional offer, all else being equal. You really have three options: have an inspection done before presenting your offer, make your offer subject to inspection (you might get it, but you risk losing out to non-subject offers), or satisfy yourself with the Property Disclosure Statement and your own thorough examination of the property with your Realtor and then make your offer unconditional. If you are at all uncomfortable with this last approach, I would advise against making such an offer.
I made a full-price unconditional offer and the sellers didn't take it. Can they do that?
Unfortunately for you, they certainly can. Sellers are not compelled to accept any offer. A seller may have another offer that is higher than yours, in which case they obviously would not accept your full price offer. Your agent should know in advance if this is likely to happen and prepare you for it.
The seller may have a preferred move-in date, as may the buyer, so this is a matter for negotiation. Often the time frame will be one to two months from the contract date.
Usually possession date is the day after completion date. This is a matter for negotiation between buyer and seller. Typically a sale registers at the Land Title Office late afternoon on completion date and possession is usually noon the following day. Any delay in registration means a delay in possession.
The sellers can dictate whatever terms they want. The buyer likewise has the right to refuse those terms or negotiate further. There is no rule that says possession date must be the day after completion date. This is a matter to be decided between buyer and seller.
Buyers are sometimes frightened away because of a multiple offer situation. I think this is because they fear they will get caught up in a bidding war and offer too high a price. The best way to approach this, in my opinion, is to have done your homework ahead of time so you know market values, then make the best offer you can. If another buyer wants to offer too high a price, there is nothing you can do about it. You may only get one chance and should not assume the seller will come back to you with a counter-offer. They may just accept the best offer. If you don't offer, you can be sure you won't get the house.
What is the difference between strata and condominium?
They are the same thing. People sometimes refer to condos when they mean apartments. Apartments have a common entry area, townhouses have their own front door, but they are all strata title ownership.
Naturally a buyer wants to know right away if the seller will accept the offer. There should always be an expiry date and time on the offer; sometimes acceptance is required immediately, sometimes the offer is left open for a few days. The buyer has the right to withdraw an offer before it has been accepted. Likewise a seller has the right not to accept an offer and to let it expire. Sellers sometimes assume wrongly that they should have the right to "sleep on it overnight". They may, if the offer is open for acceptance for a day or two, but they run the risk of the buyer getting cold feet and revoking the offer.
Usually the appliances and the window coverings are included in the sale. If you want to take the fridge, you can, but the buyers will probably reduce their offer accordingly.
Fixtures (items fixed in place) are included and chattels (items not fixed in place, such as furnishings) are generally excluded. It is up to the buyer and seller as to what is included and all items to be included or excluded should be specified in the contract to avoid disputes. Usually appliances and window coverings will be included.
In a typical market a sale might take one to three months. In a brisk market, accurately priced houses may sell within a few weeks of listing, sometimes after the first Open House or first showings.
This depends totally on how accurate an asking price the seller sets and what the buyers think the home is worth. If the buyers feel the asking price is good, they may offer full price or even higher than asking price. On the other hand, if the buyers feel the price is too high, they may not even look inside - keep in mind, they know the market very well after months of shopping, they have all the details on the property and they will know before going in if it is overpriced. Most serious buyers today will be working with an agent, will be very well-informed and will be hard to fool!
This is just a marketing ploy, and a bad one at that. If the agent set too low an asking price, then the sale price was too low as well. Asking prices are no indication of actual value. The only thing that counts is the sale price. My objective when selling a client's home is to make sure we are getting the highest possible selling price in comparison with recent sales of similar homes in the same area. I will review comparable sales and current listings with my client before the home goes on the market, so we have an accurate idea of Fair Market Value before proceeding. Whether we set a higher or a lower asking price depends on the client's situation and our marketing strategy. Focus on the selling price rather than the asking price.